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Blackstone Buying La Quinta

The $2.3 billion deal gives holders in the hotel chain a 37% premium.
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Blackstone Group agreed to acquire

La Quinta


for $2.3 billion.

The investing firm will pay $11.25 a share in cash for the hotel chain in a deal valued at $3.4 billion including debt assumption. The deal gives shareholders in Dallas-based La Quinta a 37% premium to Tuesday's closing price.

Closing is expected in the first quarter and isn't subject to any financing contingencies. On Wednesday, La Quinta rose 32%.

"We are pleased to have signed a merger agreement with one of the world's preeminent owners of hotels and resorts," La Quinta chief Butch Cash said. "Blackstone was attracted by our strong brands, high quality hotels, excellent management team and operating culture that is focused on delivering superior guest satisfaction. We believe this transaction is beneficial to our stockholders and will build on the accomplishments we have achieved over the last five years."

La Quinta jumped $2.70 early Wednesday to $10.92.